Selfridges Returns to Profit Amid Calls to Reinstate Tax-Free Shopping

Selfridges has announced a return to profitability in its last fiscal year, with its chief executive calling on the government to reinstate tax-free shopping for international visitors. The high-end department store chain attributes its improved performance to stronger in-store sales and enhanced cost control measures.

For the 52 weeks ending January 3, 2026, Selfridges posted a pre-tax profit of £13 million, a significant turnaround from the £15.9 million loss recorded in the previous year. Revenue increased by seven percent to £830.8 million, while operating profit saw an 88 percent jump to £79.7 million, driven by higher margins and increased sales across its stores. This marks a notable recovery for Selfridges, which had reported its fifth consecutive annual pre-tax loss in the prior period, which covered 48 weeks.

André Maeder, chief executive of Selfridges, described the performance as a demonstration of the retailer's resilience in a challenging economic and retail environment. He further stated that these difficulties were exacerbated by policy decisions, specifically the abolition of tax-free shopping for international visitors. Maeder expressed encouragement that this issue is now a political talking point and urged the government, led by Prime Minister Andy Burnham, to reintroduce the scheme to stimulate high streets and foster UK-wide growth.

The VAT Retail Export Scheme, which allowed overseas visitors to claim a VAT refund on goods taken home in their luggage, was eliminated for non-EU visitors in 2021 by the previous Conservative government and was not extended to EU visitors. The current Conservative party has indicated a willingness to reintroduce tax-free shopping for international visitors. Kemi Badenoch, leader of the Conservatives and former Treasury minister when the relief was abolished, commented that businesses are being disadvantaged by tax policies that deter customers.

However, the Labour party has characterized the Conservative's stance as a "spectacular U-turn." Research from the Centre for Economics and Business Research suggests that fully reinstating tax-free shopping could attract up to 2.35 million additional visitors and generate £4.1 billion in extra spending. The report also estimates that for every £1 of VAT refunded, an additional £1.54 in other taxes could be generated. Major UK retail and luxury brands, including Burberry and Mulberry, are also pressuring Prime Minister Andy Burnham to revive the tax-free shopping scheme that was abolished in 2021.